view point on Cost benefit analysis

Flip Side to the COST BENEFIT ANALYSIS
Businesses take off and run for profit maximization,this calls for in-depth study of cost monetary & non-monetary versus benefits ,monetary & non-monetary,called CBA.

The CBA is nothing more than total costs versus total benefits.the offer is justified on grounds of total benefits exceeding the total costs,but glitchhere is that all benefits & costs cn't be quantified ,leaving the argunment unsold at times.

The CBA reports states the survey details,authorization, the investment involved,the paybak time,the purpose of offer madee and the needed justification.
Here,as stated earlier the hard dollar savings are monetary justiciable, barring the soft dollar benefits at times the future cost avoidance benefit can be challenging too.

To exemplify, Cost of using machines at counters for billing & serving ,is rationalized on ground of saving FUTURE COST of hiring more staff,to solve problems of wrong orders, long waiting for placing orders.
•The present cost is reduced & can be justified at doing away with extra staff.
•But, the value of customer satisfaction ,increase in productivity, increase in goodwill remain subjective.

But the justification can be made via keeping track of the poor feedback of customers & the number of customers who left without placing orders,by accounting for average business that could otherwise would have been gained from those dissatisfied customers.It help in assigning some monetary weightage.
Another limitations are:
The Public Investmnet Analysis is difficult,
Example:The setting up of factory,will lead to employment generation,better standard of living,but environmental loss,loss to displaced families,road hurdles during construction remain subjective.

It is suited only for ranking courses of action designed to attain the same ends,like the CBA results of setting up of damn & factory cn't be compared.
Furthermore,the perception of benefits &savings is subjective.
To summarise,its worth using but shouln't be only tool used for finalising an investment.